Will we lose our house? Usually, this is the very first question heard by most Licensed Insolvency Trustees. It is the question uppermost in the minds of homeowners considering bankruptcy.
While the laws vary from province by province, the basic concept is the same: if you a lot of equity built up in your home it will most likely be sold and with the proceeds left after the mortgage and any other debts owed against the property being paid out to creditors.
The amount of equity is determined by subtracting the mortgage, property taxes, and any other debts registered the market value of the home.
So in most personal bankruptcies, the home must be sold so that this equity value can go to your creditors.
What happens if there is little or no equity in the home?
Under Ontario law, if the equity in your home does not exceed $10,000, as long as you keep making the mortgage payments you’re fine. The mortgage lender can’t force you to sell the hose, in fact, they are probably in a much better place because without the other debt obligations they stand a better chance of being paid to make their loan more secure.
What if the equity is more than $10,000 can I still keep my home?
Yes but you need to pay the bankruptcy trustee the equivalent of any equity value in your home.
Get a professional appraisal done on your house in order to determine just how much equity there is. If you can afford to ‘buy out’ this equity, bankruptcy can still be a solution to eliminating your other debts.
If you have a lot of equity in your home but not enough to clear all your debts you may want to consider a consumer proposal that will allow you to negotiate with your creditors to reduce interest and even the principle of your outstanding debt.
It is crucial to speak with our Licensed Insolvency Trustee Jean Lazard before you make any decision. Give us a call to arrange a free confidential consultation with Jean.
You can research other Canada laws around bankruptcy and home equity.https://bankruptcy-canada.com/bankruptcy/bankruptcy-exemptions-what-you-keep/
Will we lose our house? Usually, this is the very first question heard by most Licensed Insolvency Trustees. It is the question uppermost in the minds of homeowners considering bankruptcy.
While the laws vary from province by province, the basic concept is the same: if you a lot of equity built up in your home it will most likely be sold and with the proceeds left after the mortgage and any other debts owed against the property being paid out to creditors.
The amount of equity is determined by subtracting the mortgage, property taxes, and any other debts registered the market value of the home.
So in most personal bankruptcies, the home must be sold so that this equity value can go to your creditors.
What happens if there is little or no equity in the home?
Under Ontario law, if the equity in your home does not exceed $10,000, as long as you keep making the mortgage payments you’re fine. The mortgage lender can’t force you to sell the hose, in fact, they are probably in a much better place because without the other debt obligations they stand a better chance of being paid to make their loan more secure.
What if the equity is more than $10,000 can I still keep my home?
Yes but you need to pay the bankruptcy trustee the equivalent of any equity value in your home.
Get a professional appraisal done on your house in order to determine just how much equity there is. If you can afford to ‘buy out’ this equity, bankruptcy can still be a solution to eliminating your other debts.
If you have a lot of equity in your home but not enough to clear all your debts you may want to consider a consumer proposal that will allow you to negotiate with your creditors to reduce interest and even the principle of your outstanding debt.
It is crucial to speak with our Licensed Insolvency Trustee Jean Lazard before you make any decision. Give us a call to arrange a free confidential consultation with Jean.
You can research other Canada laws around bankruptcy and home equity.https://bankruptcy-canada.com/bankruptcy/bankruptcy-exemptions-what-you-keep/
